Coalition Government unveil plans for new taxes

Yesterday Britain’s new regime truly began as the Queen’s Speech outlined that the middle-classes of England were going to bear the brunt of a wave of proposed tax increases.

The main points of the Coalition plans are an increase in Capital Gains Tax, and higher taxes for people who earn more than £45,000 per year.

As part of the coalition agreement between the Conservatives and the Lib Dems, aspects of the Liberal Democrats tax policies have been brought in by Tory leader David Cameron, to the dismay of Tory voters and also senior members of the Conservatives themselves. With Capital Gains Tax applying to assets such as buy-to-let properties and second homes, this was one of the more controversial parts of the plan.

A document released by the national Treasury to accompany the Queen’s Speech read: “Capital gains on non-business assets will be taxed at rates closer to those applied to income tax.” This means that the tax levy could increase up to a maximum of 50 percent, up from the 18 percent it currently stands at. This increase is thought to be aimed at City bigwigs such as private equity bosses as many of these individuals are suspected of avoiding high-earners income tax, however the raise will also affect middle-level earners who have invested money into shares or properties for family and retirement purposes.

A new National Insurance Bill was also touched upon in the Queen’s Speech, the bill called for a raise in National Insurance Contributions for all workers earning more than £20,000, however this would effectively be negated as low-level earners will also see a drop in income tax.

The Government claims that they wish to make our tax system “fairer and simpler” and next month an emergency Budget will take place which will include the tax cuts for low-earners, and increases for high earners.